XFMedia acquires digital TV assets

Beijing - Xinhua Finance Media has acquired China Media Network that holds 49% interest in Tianjin Shidai Tianchuang, which operates four digital pay TV channels with nationwide coverage in China.

The acquisition will allow XFMedia to strategically expand its digital TV assets that already include a wide range of media assets from radio, newspaper, magazine, outdoor to online.

XFMedia will make an initial cash payment of US$5 million upon signing the agreement and the media company will make a further cash payment of US$10 million including two million Class A common shares if certain conditions are met.

The conditions include Shidai Tianchuang's successful repositioning of the channels to further expand their reach into China's upwardly mobile demographic, the transfer of the equity interest in Shidai Tianchuang and the establishment of the JV companies.

According to a report by Informa Telecoms and Media Group on China's media industry, the number of households in China with digital pay TV connections grew to 27.3 million last year from 12.9 million in 2006.

The report predicts that the number of digital pay TV households will increase to 123 million by 2013, accounting for half of all digital pay TV connections in the Asia Pacific region at that time, when the region's pay TV market is forecasted to be worth US$45billion.